Wouldn’t It Be Nice to Start Incubating a Nest Egg That Will Actually Hatch?

Nicaragua offers some of the best value property in Central America and the potential for capital growth currently rivals any other destination in the world. With tourism up over 300% in the last decade, increased flight connections with the US and a growing reputation as a safe and beautiful country, agents are dubbing Nicaragua as the ‘next Costa Rica’.

Real Estate

The real estate market is being driven by both residential and commercial property. On the residential side many baby boomers from the US are discovering Nicaragua as a less expensive alternative to Panama, Mexico or Costa Rica where prices are typically 40-50% higher and the potential for capital appreciation is slowing down. Commercially, Nicaragua’s growing economy has attracted many international banks, insurance companies and manufacturers who have now established operations in the country. Overall there has been double-digit increases in direct foreign investment annually over the last ten years. Nicaragua displays the same opportunities and possibilities that marked the beginnings of economic upswings in Costa Rica, Belize and Panama.  The real estate investment opportunity is similar to Costa Rica 20 years ago and by arriving early in this emerging market investors can expect superior capital returns.

Tourism

Tourism is the fastest growing industry in Nicaragua rising 300% in the last 10 years.  With the country receiving over 1,000,000 visitors annually, there is a growing demand for holiday property especially at the luxury end of the market.  The highest percentage of visitors are from the United States, which is growing annually by over 10% as an an increasing number of flight connections become available. Hotels in the country have high levels of occupancy and it is predicted that with the growing number of tourists there will be a hotel room deficit by 2025. This bodes well for property owners looking to earn rental income from their second home. In addition an increasing number of Americans and Canadians are retiring to Nicaragua as they discover the tax benefits, lower cost of living and investment opportunities.

The Economy

Nicaragua has enjoyed peace and constitutional democracy for over 20 years. The Sandinistas won the last election in November 2006, making their long term leader Daniel Ortega president again. Ortega has vowed to respect private property rights, the free trade agreement with the US (CAFTA), the agreement with the International Monetary Fund, and continue the macro-economic policies of his predecessor, Enrique Bolanos. Economic growth is strong with an averate 10% increase per annum of rice, beans, coffee and meat exports, mainly to the US. Unemployment rates are declining as the younger population find opportunities with  the growing number of international companies. As evidence of the recent progress in improving its business climate, Nicaragua has been ranked favourably in a variety of independent evaluations, including the Wall Street Journal’s Index of Economic Freedom and the World Bank’s ‘Doing Business Report,’ which ranked Nicaragua as the easiest location in which to start a business in the Central America region.

Safety

Nicaragua is recognized as having one of the lowest crime rate in Latin America, according to Interpol and the Inter-American Institute on Human Rights.

Buying a Property

Real estate laws in Nicaragua allow fee simple (freehold) ownership by foreigners. Real estate property transfers are executed by means of purchase agreements signed before a Nicaraguan Public Notary by means of public deeds. Once the parties have signed, a copy of the contract (called “Testimonio”) is recorded at the Property Public Registry of the department in which the property is located. At LAYA titles have been insured by First American Title Insurance Company and Stewart Title Latin America. Closing costs on the purchase of a property are approximately 4%. Of that, 1% corresponds to the withholding tax, 1% to legal fees, 0.75% to notary fees and 0.25% for registration fees.

Property Taxes

The yearly real estate tax is calculated at 0.8% of the value of the property. Nicaraguan income tax rules apply to the income generated in the sale and lease of the property. The rate will depend on the residence status of the owner. There are no restrictions to repatriate gains or incomes, as long as the tax withholding has been paid.  Tax withholding on real estate property transfer in Nicaragua is 1%.

Nicaragua – The Country

Nicaragua acquired its name from Chief Nicarao, leader of an indigenous tribe, and ‘agua’, meaning water, from the lakes and waterways that characterise the country. Home to a vibrant culture, welcoming people and beautiful year round climate, Nicaragua has a thriving tourist trade which has increased by over 300% in the last decade. President elect Daniel Ortega is committed to keeping Nicaragua on a path of growth, and welcomes the tourism boom in his homeland.

The Geography

Nicaragua is the largest nation in Central America, located between El Salvador and Costa Rica. Its west coast sits on the Pacific Ocean and the Caribbean Sea is on the east. Nicaragua has one of the most dramatic and diverse environments in the world. It has the world’s greatest concentration of inland lakes and crater lakes, lavish rain forests, and a string of 28 volcanoes, six active and twenty-two dormant. The country contains Central America’s largest forest within 78 nature reserves and national parks including the largest rain forest reserve in Central America. These parks and reserves are home to exotic flora and wildlife such as toucans, monkeys, and iguana. Nicaragua has a total of nine crater lakes, six of which are around the Managua region. One of these, Lake Nicaragua, contains an assortment of aquatic life including the worlds only fresh water shark. The lake is also home to 400 islands that are a result of an ancient eruption of Mount Mombacho, and includes a dual volcano island that is the largest lake island in the world. In addition the country has 96 rivers.

Climate

The climate in Nicaragua is similar to the Caribbean. The temperature remains warm year round, averaging 26 to 32° C in the dry season (December to April ) and 23 to 26°C in the wet season (May to November).

Flights

Nicaragua’s capital, Managua, has an international airport which receives over 50 flights a week from the US and Canada. This is approximately one hour from LAYAa. Flights depart from the US cities of Miami (2 hours), Houston (3 hours), Atlanta (3 hours), Ft Lauderdale (2 hours), LA (6 hours) and from Montreal (6 hours). The most direct route from the UK is via a US city such as Miami or Houston.

Activities

There are a tremendous number of places to explore and activities to experience in Nicaragua. Popular choices include relaxing on one of the country’s sandy, uncrowded beaches, swimming in the Pacific Ocean, a crater lake or in one of the many rivers, climbing Volcan Concepcion, touring around colonial Granada, wild life watching in one of the country’s reserves, kayaking, boating and surfing.

Architecture

Baroque has been the most popular choice for major buildings from 1600, starting with more less adorned styles followed by full, Spanish Baroque style with extravagant designs such as stone grapevines wending up massive pillars. The most famous examples of Spanish Colonial architecture can be found in Granada and Leon but colonial gems can be found scattered all over the country. The village at LAYA is modeled on the traditional architecture in Leon.

Population

Nicaragua is the least populated country in Central America with only 6 million inhabitants. The majority of the population (69%) is a mix of Spanish and Native American heritage, also known as Mestizos whose primary language is Spanish. The population is very young with over 51% under 19 years old. One in five Nicaraguans live outside the country, most in the United States, Costa Rica and Honduras. With many international companies setting up local offices, manufacturing plants and call centres in recent years there is now a burgeoning middle class that is better educated and better paid.

Culture

The country prides itself on home-grown literature, dance, art, music, and cuisine, deliberately ignoring growing globalization at its borders. This passion for their culture is a holdover from the revolution and Spanish colonization as indigenous nations won limited autonomy at enormous personal cost. Poetry is a particular passion of Nicaraguans and their writers are celebrated and revered.

Government

Nicaragua is a constitutional democracy with executive, legislative, judicial, and electoral branches of government. The country votes for a president every five years. Presidents are not allowed to run for consecutive terms, a law that was instituted in 2004. The Nicaraguan government is progressive and forward thinking. Legislators have passed laws to improve the infrastructure of the country and implement incentive programs for investors. They are also working with the U.S. Embassy to make land reform a priority.

Currency

The Nicaraguan currency is the Córdoba (C$), though most places accept and prefer the US (US$) dollar. The exchange rate is roughly C$18 to US$1 (£0.50).

About Grupo Mariana

When you’re interested in receive further details about an early investment opportunity in Nicaragua, we can give you even more excellent reasons to explore a new life in Nicaragua, whether you’re interested in vacationing, retiring, starting a new business or investing in the lucrative opportunities that abound.

We are very excited about the future of our growing resort and would love to help you learn more about Nicaragua’s Pacific Coast.

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